Govt adjusts GDP growth target

The government has asked the National Assembly to approve its decision to lower the GDP target for 2020 after encountering difficulties in achieving the figure previously endorsed by lawmakers.
Prime Minister Thongloun Sisoulith, on behalf of the government, made the request at the 9th session of the 8th Legislature of the National Assembly, which opened on June 24.
According to the government request at the NA session, the prime minister asked for the GDP growth target to be lowered from 6.5 percent to 3.3-3.6 percent in light of the country’s changing and unforeseen circumstances.

“Initially, the government thought it would be possible to fulfil the plan which the Assembly endorsed earlier. The government aimed to do its best to achieve the target set in the plan or, in the case of failure, would fall short by only a small amount,’’ the prime minister said in his report to the Assembly.
“Unfortunately, an unexpected event occurred in the first quarter of 2020 in the shape of the Covid-19 outbreak. This had a further negative impact on the economy, which was already fragile,’’ he said in explaining one of the main reasons for adjusting the GDP growth target.
Prime Minister Thongloun also asked the assembly to approve the lowering of revenue collection and expenditure targets, from 28,997 billion kip to 22,725 billion kip and from 35,693 billion kip to 33,043 billion kip respectively.
With regard to expenditure, the government proposed a 30 percent cut in the administration budget for central level bodies and a 10 percent cut for local bodies. The government also suggested postponing payment of the state investment budget by at least 50 percent of the total investment value.
To obtain sufficient funding for the government to fulfil its budget expenditure plan, the government asked the Assembly to approve an increase in the budget deficit from 3.77 percent of GDP to 5.87 percent, which would raise it from 6,696 billion to 10,318 billion kip.
The prime minister expressed confidence that the government could meet the revised GDP growth target, basing this on the actual capacity of authorities and the government’s continuing ability to keep the Covid-19 outbreak under control.
Mr Thongloun also introduced measures which the government plans to put into action over the next six months to ensure effective implementation of the revenue collection plan, rein in money supply growth and non-performing loans, and ensure stability of currency exchange rates.
 Other measures include boosting the production of goods to ensure food security, cut imports, and increase exports. Rehabilitation of the tourism industry, which has suffered hugely from the Covid-19 pandemic, was also included.
 Over the next six months, the government will also focus on promoting domestic and foreign investment, strengthening state-owned enterprises, improving the skills of workers, and alleviating poverty in remote areas of the country.

By Times Reporters
(Latest Update June 25, 2020)